COMMODITY MARKETS IN 2024: METALS AND ENERGY

COMMODITY MARKETS IN 2024: METALS AND ENERGY

Date: January 3, 2024

TREND EXPECTATIONS: UP

• CENTRAL BANKS’ MONETARY POLICY SHIFT: Lower Interest Rates Expected Across the Board

METALS: The commodity prices depend heavily on Central Banks’ interest rates. When interest rates fall in the US, the commodity prices denominated in US Dollars (Gold, Silver, Palladium, Platinum, Copper) become cheaper as lower interest rates push the value of the US dollar down. Cheaper prices, naturally, increase demand for the commodity, causing higher prices thereafter. Therefore, with lower interest rates in 2024, especially in the US, one could expect higher commodity prices in 2024.

• GEOPOLITICAL RISKS RISE: Middle East Tensions, Ukraine- Russia Conflict, China- Taiwan Tensions, North Korea Nuclear Weapon Development

METALS AND ENERGY: The recent outbreak of the Israeli- HAMAS war and Yemen’s Houthis siding with Palestinians, caused heavy transportation problems via the Suez Canal and the Red Sea, which are responsible for 12% of the global trade (including oil and natural gas). In addition to that, the ongoing conflict between Ukraine and Russia, which has no signs of ending in 2024, continued to keep investors nervous across the markets as both Ukraine and Russia are grand producers of commodities such as Palladium, Copper, Oil, Natural Gas etc. North Korea will continue to be a threat with its nuclear weapon development. China once again said they will not allow Taiwan to separate from mainland China, which increases the chances for an intervention. Geopolitical tensions increase demand for safe-haven instruments such as Gold and Silver, but also other commodities as a warring environment causes scarcity fears.

• PRESIDENTIAL ELECTION IN THE USA (November 5, 2024)

METALS: The US Presidential Election always brings worries to the world as political changes within the most powerful economy in the world may undergo changes that can impact the rest of the world. According to statistics since 2004, due to this kind of worries, Gold on average has seen an increase of 9.94% during the US presidential election year.

• CHINA ONGOING ECONOMIC RECOVERY

METALS AND ENERGY: China is the largest Palladium, Platinum and Copper consumer in the world and the largest oil importer in the world. The Chinese economy is expected to grow by around 5.00% in 2024 after a similar GDP (Gross Domestic Product) growth rate in 2023. China is expected to invest in more infrastructure projects in 2024, meaning that more commodities will rise in demand as China comes back economically.

• GOLDMAN SACHS: THE BANK EXPECTS A MAIN COMMODITY INDEX TO RISE 21% IN 2024

METALS AND ENERGY: According to Reuters, Goldman Sachs, the second largest bank by revenue in the world, expects that a main commodity index (S&P GSCI Commodity Index), could gain 21% in 2024, supported by an increase in energy part by 31%, and an increase of 17.8% contributed by industrial metals. In metals, Goldman forecasts a sharp tightening in copper stocks into the middle of the decade (2025), driving up prices from the second half of 2024.

However, please note that past performance does not guarantee future results.

SELECTED COMMODITY MARKET 2024

CRUDE OIL
Current Price: $69.20

Example of calculation based on weekly trend direction for 1.00 Lot¹

1. 1.00 lot is equivalent of 1.000 units

GASOLINE
Current Price: $2.0800

Example of calculation based on weekly trend direction for 1.00 Lot¹

1. 1.00 lot is equivalent of 100.000 units

NATURAL GAS
Current Price: $2.570

Example of calculation based on weekly trend direction for 1.00 Lot¹

1. 1.00 lot is equivalent of 10.000 units

METALS

GOLD
Current Price: $2050

Example of calculation based on weekly trend direction for 1.00 Lot¹

1. 1.00 lot is equivalent of 100 units

SILVER
Current Price: $23.300

Example of calculation based on weekly trend direction for 1.00 Lot¹

1. 1.00 lot is equivalent of 10.000 units

PALLADIUM
Current Price: $1,070

Example of calculation based on weekly trend direction for 1.00 Lot¹

1. 1.00 lot is equivalent of 100 units

PLATINUM
Current Price: $985

Example of calculation based on weekly trend direction for 1.00 Lot¹

2. 1.00 lot is equivalent of 100 units

COPPER
Current Price: $3.8400

Example of calculation based on weekly trend direction for 1.00 Lot¹

1. 1.00 lot is equivalent of 10.000 units

2. Calculations for exchange rate used as of 09:50 (GMT) 03/01/2023

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